For a few months earlier this year, it seemed like there was no stopping the wave of renewable energy projects coming online in Vietnam.

In March, the Srepok 1-Quang Minh solar power plant, Vietnam’s largest at the time, opened in Dak Lak Province. In September, it was surpassed by the Dau Tieng Solar Power Complex in Tay Ninh Province, which is Southeast Asia’s largest solar farm. The following month, the Asia Development Bank agreed to help fund the country’s first floating solar power facility on a reservoir in Binh Thuan Province. If built, it will be the region’s largest such facility. And in October, Vietnam Electricity (EVN) announced that 12,765 rooftop solar systems are selling power to the grid nationwide.

Wind power is expected to grow dramatically as well, with installed capacity forecast to more than triple by 2021, launching Vietnam toward the top of Southeast Asia in this sector. These projects were far from the only ones to come online recently. In the second quarter of this year, 81 new solar facilities were added to Vietnam’s power grid, compared to just five in the first quarter of 2019.

The Dau Tieng Solar Power Complex in Tay Ninh. Photo via VnExpress/Quynh Tran.

This growth in renewable power generation is vital, as in July, the Ministry of Industry and Trade (MOIT) admitted that the country is likely to face severe power shortages starting in 2021. Power generation capacity will need to increase from the current 48.6 gigawatts (GW) to 60 GW in 2020 and 130 GW by 2030. This is due to rapidly rising electricity demand as Vietnam continues its impressive economic growth, and delays on major thermal- and gas-fired power stations. Such an expansion of capacity is expected to cost nearly US$7 billion a year.

The explosion of solar projects in particular was spurred by a feed-in tariff (FiT) introduced by the Vietnamese government in 2017. A FiT is the rate paid by a power utility, in this case the government-owned Vietnam Electricity (EVN), to the company which operates a solar plant. The 9.35 US cents per kilowatt hour (kWh) tariff established by MOIT was very generous, and developers flooded in. A wind energy FiT was initiated in September 2018 as well, though growth hasn’t been quite as robust as solar.

Too much of a good thing?

The sheer numbers behind this solar surge are incredible, and Vietnam has become the darling of investment in the region, easily eclipsing its neighbors. The 86 new projects completed in the first half of this year added 4.5 gigawatts (GW) of capacity to the national grid, equaling about 10% of Vietnam’s total power capacity. EVN reportedly set up special teams working three shifts a day just to connect new plants.

The government had aimed to have 850 megawatts (MW) of solar online by 2020, while the 4.5 GW installed thus far has already reached their 2025 goal. Tiếp tục đọc “In the Race to Power Vietnam, Green Energy Grows Faster Than Policies Can Catch Up” →